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Ties that bind

Ties that bind

The Modi administration has done much to strengthen ties with India´s long-standing friendly European partner. Today, new business and investment opportunities being created in India are cementing this relationship even further.

The two nations have come a long way since way back in the sixties when the then budding French National Space Agency (CNES) and what would later become the Indian Space Research Organisation (ISRO) laid the building blocks for cooperation. The two agencies signed an agreement in 1964 to build Belier and Centaure sounding rockets in India, with the accompanying transfer of solid-propulsion technologies. That marked the start of many agreements that followed over the years. ISRO and CNES marked the 50th year of their collaboration last year. Today, French companies continue to explore their maiden ventures in India, driven particularly by the growth opportunities of a young and populous nation in dire need of basic services in large swathes of the country, but also increasingly aspirational.

Keen on delivering the enablers for these aspirations, a proactive Narendra Modi-led government has reached out to stakeholders worldwide, with long-standing partner France expected to play a key role.

Across infrastructure and other sectors, France already has a substantial presence in India, numbering 400 French corporate companies with about 1,050 branches, employing over 300,000 Indians. As these companies localise for India, the management of these companies is also increasingly passing on to Indian hands. This is evident from the fact 60 per cent of the 400 French companies are headed by Indian citizens.

Sylvain Biard, Trade Commissioner in Mumbai and Head of Department, South Asia (Technology & Services), Business France India, is also keen to point out France makes up for its trade deficit with India through direct investments in the country. ¨French investments in India are about $20 billion, which makes us among the top five foreign investors in India,¨ says Biard. ¨We´ve invested about eight times more than what we export every year. The sectors in which we are present range from BFSI, pharmaceuticals and IT to energy, transportation, chemicals, auto, hospitality and aerospace and defence. Most of these are only expected to increase.¨

In addition, there are about 200 independent French entrepreneurs with their offices in India. The presence of small sole proprietorship companies and small and medium enterprises (around 50-70) has also increased, adding to the share of French investments.

Not just limited to manufacturing, French companies are looking at the country as a centre for innovation and research & development (R&D). Biard estimates there are close to 20,000 people engaged in pure R&D and innovation. ¨They do lots of æIndianisation´ or localisation of products for the local market. Some of them also use India for innovating for other markets such as the emerging markets. The idea is to benefit from the spirit of innovation that India is known for, to do some kind of disruptive innovation in addition to fundamental research India is capable of with its large pool of engineers,¨ says Biard.

In fact, there is even an R&D club, coordinated by the Embassy and the consulate in Mumbai. R&D managers of companies gather for discussions on an informal basis to discuss and collaborate on relevant issues. The club already boasts of about 50-60 companies participating on a regular basis.

Urban infrastructure
The development of urban infrastructure is increasingly seen in the context of the Smart Cities project, one of the PM´s pet projects.

Olga Chepelianskaia, international expert on clean energy, eco-efficient urban development and the Managing Director at Erg Terra Expertise says the key element is having an innovative approach to planning. ¨In France, we have realised that a very hard approach to city planning often doesn´t work. I think this is even more valid in India because by the time you have set up a master plan, the demography has changed, priorities have changed. City networks have changed because of the continuous arrival of people in the city,¨ she says.

She suggests a more negotiable approach. ¨In France, we now talk about strategy as opposed to a plan. If you think about it, this gives you more flexibility. It means you do plan but you are ready to change according to the conditions that arise,¨ says Chepelianskaia.

So far, France has expressed interest in three cities on the Smart Cities project short-list, namely Chandigarh, Nagpur and Pondicherry, and will firm up its interest once the final list of cities is out in January 2016.

Aerospace and Defence
Aerospace and defence is another area of significant cooperation. Bringing companies from the two nations together on a common platform, BCI Aerospace, the specialised division of Advanced Business Events (ABE) for aviation and defence events, organised its first Aeromart Summit in Bengaluru in 2014. With 179 companies attending, 481 participants and 3,795 business meetings, the event drew leading companies from France such as Airbus, ATR, Safran, Aerolia and Dassault Aviation as well companies from other countries and India. BCI Aerospace is now set to organise the second edition of the ssummit in May 2016.

With India poised to become a large commercial and defence aircraft market, Emmanuel Bisi, Director, Expandys, BCI Aerospace, says, ¨There are wide areas of opportunity for French companies to collaborate with India and share their expertise. All segments in the aerospace industry, including civil and military aviation and space, are showing a significant level of growth.¨

The first-mover advantage goes to India´s Mahindra Group with its subsidiary Mahindra Defence announcing in July this year it is teaming up with Airbus Helicopters to produce helicopters in the country for the military. Historically, Indian companies have been clients for Airbus and ATR aircraft. Air India, IndiGo Airlines, Jet Airways and AirAsia India already host extensive fleets of Airbus passenger aircraft.

While an exhaustive look at all the business opportunities thrown up is beyond the scope of this article, suffice to say France is set to play a bigger role in India´s push for growth in the years ahead. As the Indian government continues to create a suitable environment for business as much in matters of strategic importance as on projects being implemented at the ground level, the possibilities to collaborate, learn together and share experiences are endless.

In the humdrum of business and the excitement of cooperation towards achieving greater numbers and better profitability, it is easy to lose sight of the more humane aspects of development. Perhaps, it is fortuitous one partner, India, has a storied cultural past while the other, France, is arguably more aware of the importance of one´s culture and alive to cultural nuances more than any other nation on earth. There is much to know and learn.

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